Healthcare and Pharmaceutical Sector
Healthcare headlines were dominated by key corporate acquisitions and regulatory developments. Amylyx reported positive Phase 3 data for its hypoglycemia drug, while BioMarin and LEO Pharma executed major acquisitions to bolster their rare disease pipelines. Additionally, U.S. drug prices dropped 3.1% year-over-year in July as political leadership shifts occurred at the FDA.
President Donald Trump is expected to nominate White House domestic policy deputy director Heidi Overton to serve as commissioner of the Food and Drug Administration. Overton joined the administration at the start of Trump's second term, directing health policy in coordination with the Department of Health and Human Services. Her portfolio has encompassed the administration's initiatives to redesign the food pyramid, revise the childhood vaccine schedule, and negotiate drug pricing agreements with pharmaceutical manufacturers. If formally nominated, she will require confirmation before a Senate committee.
Amylyx Pharmaceuticals reported that its late-stage trial for avexitide achieved a 55% reduction in serious hypoglycemic events compared to a placebo in patients with post-bariatric hypoglycemia. The drug acts as a GLP-1 receptor antagonist to decrease insulin production and stabilize blood sugar, targeting a condition that affects up to a third of patients who undergo bariatric surgery and currently lacks approved treatments. Amylyx acquired avexitide for $35.1 million through the 2024 bankruptcy auction of Eiger BioPharmaceuticals after shelving its previous ALS medication, Relyvrio. The company plans to submit a formal marketing application to the Food and Drug Administration before the end of the year, backed by the drug's existing breakthrough therapy designation. Mizuho Securities analysts estimate risk-adjusted revenue for avexitide could reach $1.3 billion by 2040, while TD Cowen models peak annual U.S. sales hitting $1.5 billion. Following the trial results, Amylyx shares rose 14% in after-hours trading.
BioMarin Pharmaceutical is acquiring Alesta Therapeutics for $275 million upfront to add an early-stage drug for a rare bone-wasting disorder to its pipeline. The transaction, expected to close by the end of September, also includes up to $215 million in development and regulatory milestones and will be funded using cash on hand. Alesta's lead candidate, ALE1, is a small molecule currently in a Phase 1/2 trial for hypophosphatasia, a genetic disease affecting bone mineralization. Before the deal closes, Alesta will spin out a separate entity with all of its employees to develop an unnamed second candidate. BioMarin shareholders will absorb a per-share earnings hit from the acquisition cost, and the company plans to update its guidance after the deal closes, having previously estimated full-year per-share earnings between $4.90 and $5.10.